When customers snubbed Vitrue CEO Reggie Bradford’s “white label YouTube,” he found a better way to engage them with corporate ad campaigns.

Serial-entrepreneur Reggie Bradford launched Vitrue in 2006 as a kind of “white label YouTube,” that let consumers create, upload, and rate video ads for their favorite products. Fresh off of two successful exits that had been worth more than $4 billion to shareholders, Bradford was convinced he had another winner. Consumers were increasingly demanding that companies give them a “true voice,” and what better way to do that than to put them in charge of product marketing campaigns?

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At first, it looked like his plan would work. Companies signed up. Moe’s Southwest Grill gave burritos for life (valued at $17,160) to the producer of the most popular consumer-made “Moe’s Burrito in Every Hand” advertisement. Snack-baker Lance challenged their customers to make commercials incorporating the slogan “I got Lance in my Pants!” offering a 3.5″ portable media player to the maker of the winning video. The Nerd League encouraged “fellow nerds” to create shorts that “show the world why there is nothing cooler than a monogrammed pocket protector” to promote the movie The Benchwarmers, starring David Spade and Rob Schneider.

“That should have been huge!” joked Bradford, referring to the first incarnation of his venture. But, of course, it wasn’t. Even if you could convince people to turn into corporate marketers for the price of an electronic gizmo or a free meal, they didn’t have much of an audience. Few consumers were spending time on corporate websites.

They were, however, increasingly hanging out on social networks, including MySpace and Facebook. By the beginning of 2008, people spent more than 7% of their online time on social networking sites, according to comScore, which measures online habits. Facebook had approximately 35 million unique U.S. visitors each month, a number that was fast growing, and MySpace had almost 70 million.

So, less than two years after founding Vitrue, Bradford changed tack, launching the Social Relationship Management platform. His clients would no longer have to struggle to drum up traffic on their corporate websites. He’d bring ads (user-generated or no) to their consumers on the social media platforms they were already using.

And he wasn’t focused solely on advertising. Social media would let his clients develop interactive relationships with consumers, giving customers a way to have the direct contact with companies that Bradford had initially envisioned. Products launched in 2009 let marketers message fans in newsfeeds, moderate their responses, and geo target posts. They gave individual stores more control over their marketing campaigns as well. Nationwide companies created their own apps and infrastructure, letting outlets target campaigns for their local markets, while keeping a consistent corporate look and feel across a brand.

McDonald’s, which now manages about 90 different local Facebook pages using Vitrue, was one of the early adopters. Washington, DC customers can play “McNuggets Saucy Challenge,” a game that roughly resembles a chicken product-based version of whack-a-mole. The Miami site has a photo of University of Miami football fans drinking McCafes. Astoria’s page encourages visitors to apply for scholarships from the New York Tri-State Area’s Ronald McDonald House Charities. But all the sites look roughly the same, with identical color schemes, two column designs, and fonts.

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The local campaigns have done their job. The fast-food chain has 21 million “likes,” making it one of Facebook’s most popular companies.

The change from marketing on corporate websites to social networks was neither fast, nor easy. The company, which “replaced the entire management team essentially,” wasn’t so quick to scrap its early products. But as it moved to offer more apps for community platforms, over about two years, its original business became “noncore,” as they gradually pulled out of contracts, said Bradford.

Making those changes was “scary,” said Bradford, especially in 2008, when the global recession was deepening and when angel investor Ron Conway and Sequoia Capital warned tech companies to raise funding by lowering costs. And the freedom his major investor, General Catalyst Partners, had given him was a double-edged sword. Without it, he wouldn’t be able to make the changes needed to make Vitrue a success. But with it he shouldered the bulk of the responsibility for figuring out how to turn the company around. “That’s pretty damn intimidating and especially when times are rough,” he said.

But it paid off. Vitrue now has around 500 clients, including Procter and Gamble’s Tide Laundry Detergent and chip-maker Intel. Revenue has been more than doubling annually, though Bradford declined to specify the overall figure. And, in May, Bradford, who was chief marketing officer of WebMD when in merged with Healtheon in a deal worth around $4 billion and CEO of N2 Broadband when it was purchased by Tanberg Television for about $120 million, engineered his third successful exit. Oracle bought Vitrue. Asked about the sales price Bradford would say only that it had been “speculated all over the web, so you could quickly Google it.” Tech sites estimated the deal at $300 million. Bradford would not confirm that the figure was accurate.

Bradford said the willingness to change course has been critical to his company’s success. “We’re reinventing ourselves every six months,” said Bradford, now Senior Vice President of product development at Oracle. “Frankly, if I had stayed with the business model we started with at Vitrue we’d been out of business.”

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Simone Baribeau is a freelance writer based in Miami, Florida. She has written for Bloomberg News, the Financial Times and the business sections of the Washington Post and the Christian Science Monitor. Email her at simonebaribeau@gmail.com.

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About the author

Simone Baribeau is a freelance writer based in Miami, Florida. She has written for Bloomberg News, the Financial Times and the business sections of the Washington Post and the Christian Science Monitor